Concerns about bigger supply and weaker demand sent Treasury prices lower and yields higher on Tuesday.

Bonds fell on news that South Korea's central bank was looking to diversify its $200bn in reserves, suggesting it would sell some of its dollar holdings and therefore US government bonds. South Korea has the fourth-biggest reserves in Asia.

The news from Korea coincided with the US Treasury's announcement of a scheduled $24bn sale of two-year notes on Thursday, which helped undermine prices. There was also concern over a possible rise in US consumer prices, due for release on Wednesday.